Although silver may not be a purely inflationary play like its golden cousin, a combination of looming inflation threats and a strengthening industrial sector are raising silver’s prospects.

Industrial demand for silver has picked up, helping silver ETF iShares Silver Trust Exchange Traded Fund (SLV: Quote, Profile, Advanced Chart, News) tack on 26% for the year. Last week, commodities expert Jim Rogers expressed his interest in silver, finding it a better investment than gold or platinum, as reported by the Wall Street Journal.

While industrial demand for silver increases, lackluster prices for copper and lead are keeping the supply-line flat, as silver is a by-product of lead and copper mines who are still feeling the brunt of recession. Global strikes in copper mines and falling production numbers from Peru suggest silver’s uphill climb may not be over.

Despite a strong year for silver, the metal is still lagging behind its historic 30:1 ratio with gold, even after making some headway in 2009. Analysts expect that the ground will be quickly made up once industrial demand rises out of its credit crunch lows. The chart below provides a weekly look at SLV over the past year.

iShares will soon expand its market of exchange-traded funds to Chile, creating local entities while simultaneously bringing a number of US-listed ETFs to the exchange. The products will be cross listed, similar to ADR listings on the New York Stock Exchange.

iShares is a leader in international exchange traded funds, bringing all the major markets into a giant spider web of listings. Recently, iShares listed a Peruvian ETF in Mexico after its successful launch in the United States. ETF holdings of both US and international funds grew to $7.9 billion in July from $2.6 billion in 2006, fueled by both iShares’ growth and a general underlying boom in the overall industry, according to Bloomberg.

The cross listed platform will help grow foreign interest in the United States stock markets, while bringing more interest to Latin America’s third largest stock market.

With the appeal of instantaneous market exposure, along with the benefit of diversification, emerging market ETFs are enjoying a booming popularity among American investors. In iShares’ emerging market funds alone, volume has ballooned 127% in the first six months of 2009 over the same period in 2008.

The growth of emerging market ETFs based in America is impressive, skyrocketing from $4.7 billion in 2004 to $78.5 billion in June 2009, according to Morningstar. The popularity of emerging market ETFs does not appear to be waning; for example, only one month after its June launch, the MSCI All Peru Capped Index Fund (EPU: Quote, Profile, Advanced Chart, News) has grown from $2.5 million to $22 million under management, as reported by the Wall Street Journal.

Although a handful of developed world ETFs failed due to their narrow specializations, emerging market ETFs continue to successfully hone their niches. To date, Barclays, SPDR S&P, PowerShares, Wisdom Tree, and Vanguard all sponsor specialized emerging-market ETFs.

In a landmark deal, Peruvian pension funds will swap their holdings in local firms and buy into a US traded ETF on the NYSE. The deal, which could bring several million dollars to the United States, could ultimately lead to many more agreements with developing nations.

The iShares MSCI All Peru Capped Index Fund (EPU: Quote, Profile, Advanced Chart, News) will create $300 million in new shares to complete the transfer. Current pension funds will transfer the shares to iShares, according to Bloomberg.

The transfer will allow Peruvian investors more liquidity in buying and selling assets by taking part in the New York Stock Exchange. For years, Latin American exchanges have been at a standstill due to very little buying and selling action, even on the largest of exchanges. The deal will also give the iShares MSCI All Peru Capped Index Fund greater diversity among Peruvian companies, which have been equally difficult to buy in an illiquid market.

Though New York and Peru are 3,600 miles away, they will soon be much closer for investors. A new exchange-traded fund from Global X Management will bring the first Peruvian ETF to the US stock markets.

The fund will jump into the ranks of emerging-market ETFs, which have proven to be a stronghold in the exchange-traded product sector. Many investors have begun to look overseas to protect and grow their wealth, although few Latin American nations have their own ETF.

There are ETFs for both Brazil and Argentina, but the bulk majority of emerging markets must be bought through ETFs which hold a variety of nations, rather than just one. Bloomberg reports that the Peruvian ETF is expected to make its debut any day, with Bruno del Ama, CEO of Global X Management, commenting that the ETF would be available by the “middle of June.”